As support for Alexey Pertsev, the creator of Tornado Cash increases issues over the legitimacy of his detention and the future of DeFi innovation continues to surface.
In recent months, it has seemed like the crypto market has been seized by one piece of negative news. The Office of Foreign Assets Control (OFAC) of the United States Department of the Treasury slapped legal sanctions on digital currency mixer Tornado Cash on August 8.
According to the regulatory agency, since the platform’s start in 2019, it has been utilised for an estimated $7 billion worth of unlawful money laundering operations. It is reported that $455 million of this amount was controlled by the infamous Lazarus Outfit, a hacker group supported by the North Korean government. In addition, nearly $96 million in illicit money from the June breach of Harmony Bridge and $7.8 million from last month’s Nomad robbery were laundered through Tornado Cash.
Prior to continuing, though, it would be prudent to grasp what a cryptocurrency mixer is. Simply defined, it is a service that helps to obscure potentially traceable or contaminated cryptocurrency money by erasing any associated traces, making it hard to track the tokens back to their original source.
The arrest of a creator causes widespread outrage
Dutch officials detained Alexey Pertsev, the inventor of Tornado Cash, on August 12. According to a news statement released by the Netherlands’ financial crime authority, the Fiscal Information and Investigation Service, Pertsev was arrested for “concealment of unlawful financial flows and facilitation of money laundering.”
Tornado Cash may be used by bad actors to conceal illegal earnings, but it is also utilized to enable a variety of lawful transactions. Even though other media sites have theorized and provided differing reasons for why Pertsev was detained, the Dutch police have not yet specified which laws he violated. The inventor of the tornado has not been charged with any misconduct.
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